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Begin part 2 of 2
SUBSCRIBER QUESTIONS
Q. Could you please describe in more detail what you mean by "money flow" in
your part 3 recommendations and where one can see this. Is this the technical indicator like "Chaikin Money Flow"that one sees on various charting programs? Keep up the good work. Once again, yours is the first email I go for each day, the most concise and relevant.
A. Thanks for the compliment on the report! The money flow indicator is a measurement of the net positive or negative level of money moving into or out of a stock, calculated using various proprietary methods of measuring the relationships between price and volume. Basically it is a way of determining whether there is, overall, money going into or out of a stock. While the indicator is closely related to institutional buying/selling, it differs because it refers to ALL money moving in and out of stock. Money flow indicators are found on most charting services and software; for the single indicator we use the TC2000 charting program's indicator 'money stream' which is the same thing. Money flow is not a primary, but a secondary, indicator. We use it to confirm or support analysis.
We also calculate money flow beyond using just the charting service measure, looking at many measures of money flow indicators, IBD accumulation tables, block trades and traditional 'money flow' formula calculations. We also look at flows into various types of stock funds and money market funds. With this compilation we generate our view on money flowing into a particular stock.
On the chart, the money flow indicator will track (over a chosen time period) this dynamic, but sometimes it can merely track the price up and down which isn't much of an indicator. It becomes useful, however, when we see either of the following: 1) money flow way up with price still in a base but ready to break out, tending to support our analysis of a solid pattern that presages a breakout; 2) price trying to hold at support but looking weak and money flow falling ahead of it, suggesting a potential move lower. We look for divergences, positive and negative. Positive divergences occur when money flow at the current price is higher than it was at an earlier, higher price. Similarly, negative divergence is when money flow is lower at the current price than it was at an earlier lower price.
If a rise in money flow concurs with other solid indicators, we really like seeing it. As a secondary indicator it can support analysis or let us know we may need to check that analysis again. Money flow can be useful, but we don't base buying or selling decisions on it.
THE PLAYS
Good movers Friday: ALTI; HL; IONA; JMAR; JNPR; NANO; NXG; NANX; RHAT; SYMM; XING; LNCR
Thursday night play results:
LFUS: Turned right back down on the heels of the Wednesday move.
SYMM: Blasted higher on another tremendous volume surge.
RHAT: Started the next leg higher on an excellent volume surge.
New Plays for Monday:
Play Date: 01/10/2004
TQNT (Triquent Semiconductor--$8.7; +0.38; optionable): Chip equipment
http://biz.yahoo.com/p/t/tqnt.html
STATUS: Cup w/handle. TQNT has just formed its first base after the October breakout from an 11 month cup with handle that formed after the initial run off of the 2002 low. After rallying to 8.50, it stalled in early November 2003 and formed the current 8 week base. Accumulation in the base is positive at 2 to 1 (2 up price weeks on rising volume to 1 down price week on rising volume); all it takes is positive accumulation to set the foundation for the breakout. It also formed the base right at the 50 day MVA (7.42), a sign of strength as buyers stepped in to hold it up at that point. Money flow is leading higher ahead of price as volume surged Friday along with the price as TQNT started its breakout. Looking to step in as it continues the move.
Volume: 5.43M Avg Volume: 2.433M
BUY POINT: $8.84 Volume=3.6M Target=$10.62 Stop=$8.22
POSITION: TQN EU - May $7.50c (77 delta) &/or Stock
http://www.investmenthouse.com/cd/tqnt.html
Play Date: 01/10/2004
EAG (Eagle Broadband--$1.64; -0.03; no options): Telecom equipment
http://biz.yahoo.com/p/e/eag.html
STATUS: Cup w/handle. EAG is working on the handle to an 8 week base. In late October EAG started a tremendous move that carried it over 2 intraday. It needed the rest and started the current base. Last week it started to move up, forming the right side of the base on solid trade. It then started to move laterally on lower trade, forming the handle where the easy sellers decide to call it quits. Once they are gone the stock is rid of the overhead supply and is ready to make the breakout and subsequent run. Accumulation in the base is 3 to 0 and money flow is very strong. Low in price but has a high daily average trade volume; very liquid and easy to move in and out of. Looking for a high volume breakout from the handle to jump in and make the quick gain.
Volume: 3.385M Avg Volume: 9.843M
BUY POINT: $1.84 Volume=15M Target=$2.39 Stop=$1.69
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/eag.html
Play Date: 01/10/2004
VRC (Varco Intl.--$21.3; +0.96; optionable): Oilfield services and equipment
http://biz.yahoo.com/p/v/vrc.html
STATUS: Cup w/handle. These stocks have been forming up their bases in relative silence to the rest of the market. Friday they started popping, VRC included. Volume jumped as it started the breakout move from its 7.5 month base sporting excellent 10 to 5 accumulation. Money flow is screaming higher ahead of price as relative strength moves toward a breakout as well, a further indication of a good breakout move. Oil prices have been rising, and as they look sustainable, service stocks rise as well because there is more need for their services as more wells are drilled and worked over to increase production levels.
Volume: 1.351M Avg Volume: 646.909K
BUY POINT: $21.42 Volume=1M Target=$27.62 Stop=$20.22
POSITION: VRC ED - May $20c (76 detla) &/or Stock
http://www.investmenthouse.com/cd/vrc.html
Continuing:
These plays are good movers that have made or are making nice and orderly pullbacks to test the latest surge. On bounces higher on stronger trade they are good add-to points.
ACO; CAMD; SBUX; WMS
SINA and XING are preparing the next move as well. SINA is forming a handle while XING resumed its move on strong trade.
SUBSCRIBER PORTFOLIO: These are stocks subscribers suggest by vote that we put in a portfolio to track and move into the stocks if they set up well.
AVID, COH, DIS, GTRC, KKD, LPNT, OCR, TGT, UTSI, XMSR
GTRC: Trying to hold onto the big gap higher, testing back to the 10 day MVA on very low volume. Needs to hold at the 33 level.
SUBSCRIBER WATCHLIST
We continually receive ideas for potential plays from our subscribers. Many times they are already on our watchlists, other times not. We always take a look at them and sometimes find a few pearls. We are including subscriber choices that could develop into plays. We are not necessarily endorsing these, but want to provide a forum for subscribers with ideas that may appeal to their portfolio. Typically we will put these on without commentary, but if we see something we really like or dislike we will point it out. That way we can maybe come up with some new plays, find some plays that may fit your style, and have another great educational tool to discuss problems or good aspects about stocks our subscribers are looking at.
NVDA: Specialized semiconductor that is surging up the 10 day MVA after a late December breakout over resistance at 22.
MTLG: Big volume break higher on Tuesday but faded to end the week, Friday on rising, above average volume. It held the 18 day MVA on the low and closed at the 10 day. If it can hold here and start anew it looks pretty good.
CONTINUING:
* * SPREADSHEET DOWNLOAD * * *
The following link is to a spreadsheet download of the continuing play table. It will allow you to sort the data for your own investment use. This is a service to our subscribers only, and no other use of the information is authorized. Simply click on the link, enter your username and password, and download the spreadsheet!
http://investmenthouse.com/daily/table.php
(You will need your password ... if you need help click on this link and our automated system will email it to you immediately once you fill in your email address:
http://www.investmenthouse.com/rescue/rescue.php3 )
LEGEND
DATE: date play first appeared on report.
PLAY: Denotes the type of pattern or play.
Upside play types: A Wedge=Ascending triangle/wedge; BO=Breakout; Cup=Cup base; Cup hdl=Cup w/handle; DB hdl=Double bottom w/handle; Dbl btm=Double bottom; Flat=Flat base; FlyPlat=Flying Plateau; Pennant=Pennant; Rv H&S=Reverse head & shoulders; Saucer=Saucer base; Test 18=Testing 18 day MVA; Test 50=Testing 50 day MVA; Test BO=Testing the breakout (could be 10 day MVA test, etc.)
Downside play types: CCall=Covered Call; DWedge=Descending triangle/wedge; Dbl Top=Double top; H&S=Head & shoulders; Put (generic downside);
PIVOT=Buy point
Tgt=Target stock price for the play. Applies to stock and options.
Vol=Volume for the most recent session.
TgtV=Target volume to enter the play.
Stop=Stop advisory point. This is advisory and we may or may not exit a play if it hits this level depending upon market conditions.
Upside Plays
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
ACO 12/29 Cup hdl 21.85 +0.01 19.99 23.85 218K 500K 21.11
Current. Gapped down to open on the 10 day MVA and rallied on low volume. Moving up after testing the breakout.
ADCT 12/22 DB hdl 3.55 +0.08 3.01 3.88 47M 26M 3.38
Current. Continue to move up the 10 day MVA for a nice move on stronger volume. Tapped 3.76 at the intraday high, but gave most of it back.
AIR 12/15 BO 15.18 -0.79 12.04 14.55 409K 150K 14.94
Current. Thudded down holding below the 10 day MVA on lower, but strong volume. Testing the break out.
AIRN 12/04 Test BO 3.69 -0.09 3.22 4.18 570K 537K 3.49
Current. Pull back on average volume. Still in uptrend moving up the 10 day MVA.
ALTI 01/02 Test BO 3.48 +0.28 3.02 3.78 5.7M 2.3M 3.05
Current. Continue to move up the 10 day MVA for a nice gain on stronger above average volume. Tapped 3.69 at the day's high, but gave some of it back.
ALTI 12/01 Dbl btm 3.48 +0.28 2.05 2.74 5.7M 1.2M 3.05
Current.
AMSC 12/29 Cup hdl 16.5 +0.1 13.37 16.22 454K 500K 15.55
Current. Continue to move up the 10 day MVA showing a doji on above average volume.
AUGT 01/05 Flat 22.5 -0.15 21.82 25.95 157K 362K 20.75
Current. Pull back showing a tight doji on very low volume. Still in uptrend.
AZPN 12/18 Flat 11.2 -0.23 9.17 11.12 677K 1M 10.61
Current. Low volume pull back. Still in the pattern.
CAMD 12/30 Cup hdl 10.12 -0.22 9.68 11.62 174K 456K 9.68
Current. Continue to test the break out on low volume.
CHU 01/02 Test 50 11.3 -0.25 10.02 12.25 1.6M 880K 10.94
Current. Gapped up at the open, but reversed on lower, but still strong volume. Still in uptrend.
CTRA 12/10 Cup hdl 4.89 +0.07 4.45 5.69 300K 500K 4.46
Current. Volatile session with 5.08 at the high and 4.60 at the low. Moving up the 10 day MVA on average volume.
CYD 01/02 Flat 28.03 -0.35 33.64 40.45 1.2M 4M 31.29
Current. Pull back showing a tight doji on the 50 day MVA on low volume. Looking for a bounce off the 50 day MVA.
DIS 08/09 Test 50 24.87 -0.09 22.06 26.48 7.4M 9M 24.12
EBAY 12/12 Test 18 63.4 -1.03 34.72 46 6.9M 12M 62.25
Current. Pull back below the 10 day MVA on below average volume. Still in good shape.
EBAY 10/15 Test 50 63.4 -1.03 31.22 46 6.9M 12M 62.25
Current.
ESIO 01/06 Cup hdl 27.86 -1.34 27.44 32.75 281K 240K 27.52
Current. Continue to test the break out on much lower, but still strong volume.
FDRY 12/29 Flat 29.82 +0.61 26.65 32 3.1M 3.5M 27.85
Current.
FDRY 11/24 Flat 29.82 +0.61 24.72 29.72 3.1M 3.5M 27.85
Target Hit. Took some of the money off the table as the stock continues to move up the 10 day MVA on above average volume.
FL 10/11 A Wedge 23.52 +0.26 17.38 20.88 699K 1.4M 22.77
Current. Moving up the 10 day MVA on low volume.
FSII 11/25 Flat 7.94 +0.29 6.54 7.98 128K 400K 7.32
Target Hit. Took all money off the table when the stock hit the target.
GEB 01/03 Cup 1.59 -0.01 1.51 1.98 978K 1M 1.39
Current. Fractional pull back showing a doji on much lower volume. Beginning to make a lateral move above the 10 day MVA.
GENE 01/07 Flat 4.09 +0.11 3.88 4.85 929K 497K 3.58
Buy Not Issued. More volatile with 4.27 at the high and 3.81 at the low as stock continues to move up the 10 day MVA on strong volume. did not enter the play, because did not like the volatility.
GMR 12/04 Test 18 19.52 -0.33 14.77 17.78 268K 207K 18.98
Current. Pull back on much lower, but still above average volume. Still moving up the 10 day MVA.
GNLB 12/20 Cup hdl 2.77 -0.06 2.43 3.12 417K 786K 2.72
Current. Gapped up at the open, but reversed holding above the 10 day MVA on low volume. Still in good shape, but needs to hold here.
GOLD 01/09 Cup hdl 28.1 +0.73 28.18 33.95 249K 680K 27.12
Current. Beginning to move back up the 10 day MVA on rising volume. Still in the pattern.
HL 12/29 DB hdl 9.06 +0.3 8.52 10.65 2.6M 2.5M 8.55
Current. Moving up the 10 day MVA for a nice gain on rising volume after testing the break out.
INAP 12/08 Test BO 2.49 -0.01 2.47 3.05 4.7M 5.2M 2.34
Current. More volatile session with 2.37 a the low (18 day MVA)and 2.64 at the high showing a doji on the 10 day MVA on low volume.
INAP 11/25 Test BO 2.49 -0.01 1.95 2.58 4.7M 5.7M 2.34
Current.
IONA 12/20 Test BO 6.5 +0.49 5.96 7.58 791K 600K 6.48
Current. Another explosive move up the 10 day MVA on strong volume.
IVIL 12/23 Flat 3.86 -0.09 3.59 4.52 282K 340K 3.65
Current. Pull back on much lower, but still above average volume. Still in good shape.
JMAR 01/02 Rv H&S 4.08 +0.92 2.74 3.62 3.8M 500K 3.78
Target Hit. Took some of the money off the table as the stock made an explosive move on strong volume surge.
JNPR 01/03 BO 22 +0.7 20.12 23.55 19M 10M 20.94
Current. Took half of the option gain as the stock has been
quick out of the gates. Letting the rest run as it
surges ahead of earnings next week. If we get a further
run to earnings we will look at taking some more gain.
KEI 12/29 A Wedge 21.31 +0.16 18.73 22.78 66K 150K 20.55
Current. Moving up out of the lateral move on rising volume.
LFUS 01/08 Cup hdl 30.01 -0.92 31.12 37.35 108K 145K 29.65
Buy Not Hit. Pull back to test the 18 day MVA and rallied holding above the 10 day MVA on average volume. Still in good shape.
LPNT 08/09 Rv H&S 32.87 -0.18 0 0 962K 1.3M 31
Buy Not Issued. Volatile session with 33.40 at the high and 32 at the low showing a doji on much lower, but above average volume. Still in uptrend.
MTZ 12/26 Flat 14.8 -1.03 14.81 19.32 612K 300K 15.08
Current. Fell hard late to the 18 day MVA after looking as if
it would bounce. Must bounce here or exit.
NANO 01/05 Rv H&S 20.5 +3.37 17.18 20.58 2.9M 500K 19.45
Target Hit. Took some of the money off the table as the stock gapped up at the open and continued to surge on very strong volume.
NANX 01/03 Test BO 12.39 +1.89 10 12 3M 300K 11.32
Target Hit. Took some of the money off the table when stock made an explosive move on excellent volume surge.
NOOF 11/01 Cup hdl 10.16 -0.31 5.27 6.32 298K 319K 9.95
Current. Gapped down at the open showing a tight doji above the 10 day MVA on low volume Testing the break out.
NOOF 10/25 Cup hdl 10.16 -0.31 4.78 6.21 298K 280K 9.95
Current.
NXG 01/05 Flat 2.41 +0.07 2.35 3.05 1.1M 11M 2.17
Current. Continue to move up the 10 day MVA for a nice gain on low volume.
OHI 12/08 Flat 9.47 -0.03 8.71 10.48 143K 200K 9.23
Current. Pull back showing a doji on above average volume. Doji may indicate a change in the pattern.
ONNN 12/16 Test BO 7.42 +0.23 7.42 8.88 3.4M 3.4M 6.79
Current. Tested the 10 day MVA and rallied on stronger volume. Tapped 7.77 at the high, but gave some of it back. Continue to climb the 10 day MVA.
OPLK 01/06 Cup hdl 2.5 -0.2 2.81 3.54 2.3M 1.2M 2.59
Buy Not Issued. Thudded down holding the 10 day MVA on above average volume. Held at support. Needs to rebound from here or will look to drop.
PAL 12/29 Test 50 7.89 -0.12 7.96 9.54 168K 314K 7.55
Current. Continue to pull back showing a tight doji just above the 10 day MVA. Testing the break out.
PTEK 01/06 Flat 10.15 +0.13 9.78 11.75 1.6M 1.4M 9.09
Buy Not Issued. Continue to move up the 10 day MVA on strong volume. The stock did not make the move we were looking for so will drop but will keep out eye on it.
PTNR 12/24 Cup hdl 8.14 -0.06 7.41 9.35 48K 135K 7.71
Current. Pull back on very low volume. Still in uptrend.
RECN 01/05 Cup hdl 34.32 -0.1 29.7 35 410K 163K 31.95
Current. Pull back on much lower volume. Still in uptrend.
RHAT 01/09 Test BO 20.39 +1.3 20.25 24.55 16M 7.1M 18.62
Current. Nice move up the 10 day MVA on stronger above average volume.
RHAT 12/18 DB hdl 20.39 +1.3 16.51 19.58 16M 5.5M 18.62
Current. Nice move up the 10 day MVA on stronger above average volume.
RWY 11/04 Cup hdl 8.48 +0.05 6.24 7.85 42K 146K 8.04
Current. Continue to move up the 10 day MVA on low volume.
SBUX 07/30 Cup 33.1 -0.28 30.35 36.75 2.6M 6M 32.55
Current. Pull back showing a doji on the 10 day MVA on average volume. Testing the break out.
SBUX 07/01 Cup 33.1 -0.28 26.3 30.94 2.6M 6M 32.55
Current.
SINA 01/07 DB hdl 40.65 +0.1 42.04 50 4.7M 12M 39.1
Buy Not Issued. Gapped down at the open, but rallied to recover the loss on low volume. Still in good shape.
SYMM 01/08 Cup 8.59 +0.77 8.28 10 1.4M 346K 7.58
Current. Entered the play as stock made an explosive move up on very strong volume.
TGA 12/08 A Wedge 2.61 +0.05 2.12 2.78 277K 305K 2.36
Current. Continue with lateral move showing a doji on low volume.
TGT 08/09 Flat 37.05 -0.71 41.45 50 4.8M 5.7M 38.74
TRPH 12/11 Test BO 8.2 +0.37 6.49 7.68 2.1M 1.7M 7.27
Current. Continue in its uptrend pattern.
TRPH 12/01 Test 50 8.2 +0.37 5.58 6.94 2.1M 1.7M 7.27
Current.
TSAI 12/13 Flat 22.7 -1.64 22.95 27 344K 629K 22.25
Current. Thudded down below the 18 day MVA on above average volume.
TSCO 07/29 Test BO 40.11 -0.11 28.06 31.44 271K 494K 38.88
Current. Continue to base around 40 on low volume.
TSCO 06/03 Rv H&S 40.11 -0.11 23.42 27.62 271K 603K 38.88
Current.
TSCO 04/24 Cup hdl 40.11 -0.11 21.88 26 271K 603K 38.88
Current.
TSCO 04/03 Rv H&S 40.11 -0.11 19.3 22.19 271K 577K 38.88
Current.
TXN 12/18 Test 50 31.78 -0.07 31.22 36.32 18M 18M 30.02
Current. Fractional pull back on above average volume. Still in uptrend.
VOD 10/28 Cup hdl 27.52 +0.4 21.45 25.75 2M 2.8M 26.35
Current. Continue to move up the 10 day MVA on low volume.
WMS 11/21 Dbl btm 27.34 -0.1 25.83 31.22 176K 650K 26.48
Current. Gapped down showing a tight doji on low volume. Still in good shape.
XING 01/07 Flat 12.8 +0.82 11.25 14.25 3M 862K 10.94
Current. Continue with its uptrend pattern with a great move up the 10 day MVA on strong volume.
YHOO 12/11 Rv H&S 48.12 -0.46 44.65 53.35 9.5M 17M 46.32
Current. Pull back on average volume showing a doji. Still in uptrend and moving up the 10 day MVA.
Downside Plays
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
LNCR 12/10 Put 28.53 -0.77 30.89 28.04 2.1M 2.5M 29.72
Current. Gapped down and continued to fall down the 10 day MVA on above average volume.
Good Investing!
Jon L. Johnson and The Daily Staff
All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners of Online Investment Services, LP or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.
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